More than 10 years ago, the energy drink category was revolutionized by the introduction of 5-Hour Energy shots, made by Farmington Hills, Mich.-based Living Essentials LLC. This new concept maximized the convenience factor for consumers and even created new merchandising opportunities. In the battle to compete, many manufacturers joined the energy shots segment, creating an entire sub-category.
Today, the pendulum is swinging back in the other direction — this time toward energy drinks with a healthy appeal.
After many years of growth, energy shots’ performance has flattened out in recent years, says Gary Hemphill, managing director of research at New York-based Beverage Marketing Corporation (BMC). More specifically, the energy shots segment experienced a 4.7 percent decline in dollar sales in grocery, drug, mass market, convenience, military, and select club and dollar retailers for the 52 weeks ending April 22, according to Information Resources Inc. (IRI). In contrast, non-aseptic energy drinks increased 3.7 percent in dollar sales during that same timeframe.
Consumers drink energy shots for a quick boost of energy in a portable form, says IRI’s Vice President of Thought Leadership Susan Viamari. In the past, energy drink and shot consumers typically prioritized function over flavor; however, today’s beverages are balancing the two qualities, making energy drinks much more enjoyable to consume. As a result, the energy drinks category has become more competitive.
Additionally, the growth of energy drink mixes is stealing share from the energy shots segment, Viamari says. Energy drink mixes consist of a liquid or powder concentrate that can be added to water, allowing consumers to customize their experience. The segment increased 15.8 percent in dollar sales in multi-outlets for the 52 weeks ending May 20, inching up slightly over the prior-year timeframe, she notes. Energy drink mixes are a small but notable part of the energy drink market, she adds.
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